As interest rate cut expectations rise, Asian stock markets collectively rise, with the Nikkei standing above 40,000 points for the first time
Affected by the rise of U.S. stocks and expectations of interest rate cuts by the Federal Reserve, Asian stock markets generally rose, with the Nikkei 225 index breaking through 40,000 points for the first time. Market expectations for interest rate cuts by the Federal Reserve have strengthened, with the swap market having priced in two rate cuts and increased bets on a third. The rise in the Japanese stock market is mainly driven by the semiconductor sector, supported by demand for artificial intelligence and the easing of tensions in the Middle East
Driven by the rise in U.S. stocks and the increasing expectations of interest rate cuts by the Federal Reserve, Asian stock markets generally rose, with the MSCI global index expected to reach a new historical high. The Japanese stock market saw a strong increase on Friday, with the Nikkei 225 index breaking the 40,000-point mark for the first time since January.
This week's weak economic data from the U.S. further strengthened market expectations for interest rate cuts by the Federal Reserve this year. The swap market has fully priced in expectations for two more rate cuts this year and has increased bets on a third cut. San Francisco Fed President Mary Daly acknowledged in an interview that she sees more and more evidence suggesting that tariffs may not lead to a significant or sustained surge in inflation, which makes her open to a "fall" rate cut. However, Boston Fed President Susan Collins stated that she expects at least one rate cut this year but hinted that a cut in July may be premature.
Masahiro Ichikawa, Chief Market Strategist at Mitsubishi UFJ DS Asset Management, stated that the Japanese stock market is expected to continue its upward trend today, mainly driven by the semiconductor-related sector. Factors such as anticipated demand for artificial intelligence, easing tensions in the Middle East, expectations of Fed rate cuts, and reduced risks of U.S.-China conflict are supporting the market.
On Friday, the Tokyo Stock Exchange index rose 0.8% to 2826.15 points, and the Nikkei 225 index rose 1.5% to 40180 points.
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